NFIB Study Finds Small Business Hiring Dropped in June

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Despite nationwide economic growth that surpassed expectations in June, small business hiring dropped again last month, suggesting small businesses played only a minor role in gains made across the country. According to the National Federation of Independent Business (NFIB), employment at small firms declined by an average of 0.09 employees, more than double the decline reported in May.

More small businesses are shrinking rather than growing, the report found, and optimism among entrepreneurs is falling. NFIB chief economist Bill Dunkelberg attributed some of the decline to confusion and concern over the major health care reforms that were recently delayed.

In a statement, Dunkelberg criticized the federal government for their small business policies.

“We only have to look to Washington for reasons why our economy can’t seem to maintain steam and is on a painfully slow journey towards job creation,” Dunkelberg said.

Although Washington practices have had mixed results in helping small business owners, the drop in hiring is likely also due to external factors. Sales have been lagging this summer, despite 195,000 new jobs being added to the economy in June.

Hesitant to hire
Wary business owners may also be one of the root causes of slow hiring rates. Companies that have weathered the ups and downs of the economy over the past several years are still hesitant to make new hires and take on any additional overhead costs.

These business owners are, according to Sageworks chairman Brian Hamilton, waiting for the economy to show steady improvement before making any workforce changes. Hamilton went on to tell The Washington Post that hiring rates are still lower than where he and other financial experts expected they would be by 2013.